USD Economic Index is off the charts

That’s according to the USD Burham-Moores Center for Real Estate Index of Leading Economic Indicators, which reached an all-time high of 151.1 in January.

That’s right. San Diego has never been in a better position, Index-wise. The former high-water mark for the Index was in May and June of 2010, when it reached 150.8.

The tool looks at six categories: building permits, unemployment insurance, local stock prices, consumer confidence, help wanted advertising and the national economy.

And we are rocking every category. “January’s gain was the second straight strong increase in the USD Index and the 15th month in a row where it had not fallen,” the report said.

But how accurate is the Index? No doubt, it is a comprehensive look at San Diego’s economic picture but is this truly our shining moment?

For instance, how can the Index paint such a rosy picture when developers complain about how the residential building climate has been soured by lack of available land and anti-growth actions. The 1,700-home Lilac Ranch development was shot down by voters convincingly, for instance.

Economist Alan Gin, who complies the Index, agreed that the number of building permits issued hasn’t reached pre-recession levels, but they are beginning to near it.

He does not break down the residential building permits by single-family homes and multifamily units, either. That could be a big distinction. That’s because single-family homes bring a bigger economic punch. They require more furniture and lawn care equipment, for instance.

However, Gin did say that the number of single-family homes has been increasing. “In 2017, we saw the biggest number of single-family homes since the great recession,” he said.

He has made tweaks to his index to make it more relevant today, he noted. For instance, when calculating help wanted ads, he relies strictly on online numbers, not newspapers. Newspaper have lost much of its classified advertising to the internet.

But he doesn’t track the type of jobs being advertising. Are they mostly low-wage service jobs? If so, they may not signal a booming economic cycle even if the numbers are going up.

Gin has been producing the Index since August of 1991, but he has data going back to July, 1977. And he’s confident that the numbers have never been this high. In 1977, the indicators totaled only 100.

He was not shocked that the Index has reached this level, given recent trends, he said. He points to unemployment, which stood at 3.3 percent in December. Local stock prices rose nearly 20 percent in 2017.

"The economy is doing pretty well," he said, which, given the Index, sounds like an understatement.